SHORT ANSWER:
The freezing of bank accounts by the Income Tax Department is governed by Section 281B of the Income Tax Act, 1961.
DETAILS:
- This section allows the Income Tax Department to freeze a bank account if they believe that the taxpayer is likely to evade tax.
- The freezing can be done for a period not exceeding 6 months.
- The taxpayer must be informed about the freezing and the reasons for it.
PUNISHMENT / IMPLICATIONS (if applicable):
- If the taxpayer does not comply with tax obligations, further legal actions may be taken, including penalties.
SOURCE:
- Income Tax Act, 1961
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